1.43 Our evidence suggests that departments do not appear to fully understand all situations that may yield refinancing benefits. The OGC considers that this is in part because some of these financial changes would not have been classified as refinancings in the earlier 1999 Treasury guidance. A further problem is that, while some financing changes, such as lower lending margins or extending the period of the debt, will clearly create refinancing gains, in other cases further information would be required to determine whether or not the change will have created a refinancing benefit for the consortium's shareholders.
1.44 There is a particular issue relating to information about local authority PFI projects that have been subject to central government approval and financial support. PFI credits from central government, a form of financial support for local authority projects, are running at £2 billion a year. The OGC and departments receive only limited information about these projects after they have approved the letting of these contracts. We also found it difficult to gather information about the current financing of these projects. It is therefore unclear how much refinancing activity may be taking place on these projects. The OGC notes that many local authority projects are small and may not be susceptible to refinancing, although this sector also includes some large local transport projects and school redevelopments where the OGC and PUK would take a close interest in any refinancing.